US stock futures steady as Treasury yields hit multidecade highs ahead of PCE data

  • US stock futures steadied as Treasury yields reached fresh multidecade highs.
  • October Fed hike bets fell from above 70% to roughly a coin flip.
  • PCE inflation data was scheduled for release Wednesday as the next market test.

US stock futures steadied Wednesday after Treasury yields climbed to fresh multidecade highs, with investors awaiting the Personal Consumption Expenditures (PCE) index, the Federal Reserve's preferred inflation gauge. Dow futures rose 0.4%, S&P 500 futures added 0.2%, and Nasdaq-100 futures traded at 0.2% after stocks slipped fractionally the previous day. Rising bond yields and volatile oil prices continued to weigh on sentiment as the war in Iran entered its seventh month. Crude futures stabilized in the mid-$90-per-barrel range. Traders reduced the probability of an October Federal Reserve rate hike to roughly 50%, from above 70% a day earlier, while the market's bias shifted slightly toward a rate hold after New York Federal Reserve president John Williams said there was "no need for urgency" to raise rates. Economists expect core PCE inflation, excluding food and energy, to remain at 3.3% year over year. Micron earnings after the closing bell and Conagra Brands results before the opening bell were also due to provide updates on the memory, artificial-intelligence and consumer-goods markets. The dollar remained near its 2025 high against the euro and was on track for its biggest monthly gain against the currency in 14 months, supported by US growth and higher US interest rates as Europe faced energy and debt concerns. The euro fell to $1.1312 on Tuesday, its lowest level since May 2025, and traded near $1.1339 in Asia on Wednesday. It was also testing support around 178 yen. The dollar was up nearly 2.5% against the euro in September and was set for a third consecutive quarterly rise. Brent Donnelly, president of foreign exchange trading at analytics firm Spectra Markets, said the US economy was running hot while Europe was losing the global AI race, with energy supplies and French politics remaining concerns for the euro.

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